Friday, June 30, 2017

IndiGo interested in buying out Air India

There is a new name among the potential buyers of Air India. IndiGo, India’s largest low-cost carrier and 41% market share holder has expressed an official interest in buying the debt-ridden national flag carrier – but only if it is profitable.

IndiGo has written a letter to the civil aviation ministry, expressing an interest in buying Air India’s international operations as well as its profitable subsidiary – lowcost carrier Air India Express.

If the government does not agree to these terms the company is “equally interested” in buying Air India and Air India Express with all their operations.

However, IndiGo president Aditya Ghosh has said that the company is only interested if it is profitable and will bring additional value to IndiGo. Ghosh’ fear is not unreasonable, as another well-known Indian airline, Kingfisher, has gone bankrupt in 2012 after buying out an unprofitable airline in 2008.

The expressed interest in the buy-out of the national carrier signals IndiGo’s ambitions to become a world-class international airline. Although Air India, with a 14% market share, is ‘only’ the third biggest airline in the country, it has a well-established network of international flights that constitute 17% of its portfolio.

Air India is a state-owned airline, whose debt has reached $8 million. Earlier this month India’s government has suggested that the airline might be sold within the next 6 months.

Tata Sons is also considered to be among potential buyers, especially as Air India was set up as Tatas Airlines in 1932, before being made public and, finally, nationalized. However, Tata Group has not yet expressed an official interest.

(AeroTime News)

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